KNM v. HTF

HCMP 288/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 288 OF 2011

(ON AN INTENDED APPEAL FROM FCMC NO. 14334 OF 2007)

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Hon Hartmann JA:

1.  All of the petitioner’s proposed grounds of appeal seek to attack findings of fact made by the judge. When there are contested issues of fact, it is for the trial judge, who has the opportunity to hear the witnesses and to consider their testimony in the context of the evidence as a whole, to discharge the role of the primary finder of fact. As such, an appeal court will not upset findings of fact unless, for the reasons set up by Fok JA in paragraph 23 of his judgment, it is of the view that such findings are plainly wrong.

2.  The petitioner feels strongly that the judge made a series of incorrect findings of fact, effectively all of the findings that did not favour her case.  However, with respect to the petitioner, nothing has been put before us by her, and the burden is firmly on her, to demonstrate a strongly arguable case that the judge misunderstood the evidence, overlooked important evidence or in some way came to conclusions of fact that, in the context of the evidence as a whole, were plainly illogical or in some other way plainly wrong.  As such, I have been drawn to the conclusion that none of the grounds advanced by the petitioner had any real prospect of being successfully argued should leave be granted.

3.  Accordingly, for the reasons given by Fok JA, I too am drawn to the conclusion that her application must be dismissed.

Hon Fok JA:

Introduction

4.  By a judgment dated 24 September 2010, His Honour Judge C.K. Chan made orders for ancillary financial relief in favour of the petitioner against her former husband, the respondent.  He declined the petitioner’s applications to make certain orders adding back assets and monies to the family pool.

5.  The petitioner applied to the Judge below for leave to appeal.  By a decision dated 27 January 2010, the Judge refused leave.

6.  By summons dated 25 February 2011, the petitioner applies to this court for leave to appeal.

The relevant provisions

7.  The summons does not identify the statutory provision or rule of court by which leave is sought.  As the Judgment is one from the District Court, the source of jurisdiction for the application must be section 63A of the District Court Ordinance (Cap. 336) and the practice and procedure of the application is governed by Order 58 of the Rules of the District Court (RDC) and Order 59 rule 2A of the Rules of the High Court (RHC).

8.  Leave to appeal shall not be granted under section 63A of the District Court Ordinance unless this court is satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interests of justice that the appeal should be heard.

9.  The relevant test of whether an appeal has a reasonable prospect of success under section 63A is whether the applicant for leave can show that he has an arguable case with reasonable chances of success on appeal.  A reasonable prospect of success therefore means an appeal with prospects that are more than “fanciful” but which do not need to be shown to be “probable”.

10.  Where an application for leave to appeal has been refused by the Judge below, a further application for leave may be made to this court within 14 days of the date of refusal: RDC Order 58 rule 2(4A).

11.  The application to this court (by summons dated 25 February 2011) was made more than 14 days after the date of refusal of leave by the Judge below on 27 January 2011 (i.e. 10 February 2011). By the time of the application before us, the time for appealing had therefore expired.

12.  An application to this court for leave to appeal must be made by summons, which must include where necessary an application to extend the time for appealing: RHC Order 59 rule 2A(3).  The summons for leave to appeal accordingly seeks, as the first order sought, an order that:

“the time for the Appellant (Petitioner) for leave to appeal be extended for further 14 days from the date of the order to be made herein notwithstanding that the time for so doing has expired.”

13.  The summons seeking leave to appeal is supported by a short affirmation of the petitioner dated 24 February 2011 (the day before the summons for leave to appeal) to which she exhibits the Judgment below, the Decision refusing leave to appeal and a draft Notice of Appeal entitled Intended Grounds of Appeal and which she describes as her “initial draft Grounds of Appeal”.  She adds:

“I hereby reserve my rights and will attempt to polish further this initial Grounds of Appeal well before the hearing of this application.”

14.  Unhelpfully, contrary to paragraph 7 of Practice Direction 4.1, the summons was not accompanied by a skeleton argument from the petitioner setting out why leave to appeal should be granted.  By the time of the hearing before us, the petitioner filed a Notice to Act in Person and was unrepresented.  Although she has filed a document dated 5 August 2011 entitled Petitioner’s Intended Grounds of Appeal seeking to explain the basis on which leave to appeal is sought, this does no more than summarise and cross-refer to her initial draft Grounds of Appeal exhibited to the petitioner’s affirmation.

Is there a good basis to extend time?

15.  As part and parcel of the application for leave to appeal, the petitioner requires an extension of time in which to make the application for leave to appeal.  The application is 15 days out of time.  This is not a substantial period of time but, equally, the respondent was entitled to regard the Judgment as being final once the 14 day period for a renewed application for leave to appeal had expired (which it did on 10 February 2011).

16.  An extension of time for appealing is a matter which lies within the discretion of the court.  An application for an extension of time should be supported by an affidavit deposing to any facts relied on by the applicant and giving a full account of, and explanation for, the whole of the delay since time expired: see Hong Kong Civil Procedure 2011, Vol. 1 at Note 59/4/10 (p. 1033).  This commentary is made in the context of an application to file out of time a notice of appeal in respect of an appeal which lies as of right.  Nevertheless, there is no good reason why this requirement should not apply equally to an application for an extension of time in which to apply for leave to appeal as it does to an application to file a notice of appeal out of time.

17.  Here, the petitioner has given no explanation for the delay whatsoever in her affirmation in support of the application.  In her oral submissions, the applicant claimed the application was only one day out of time and that the fault for this lay with her former solicitors because she had already signed her affirmation in support of the application before the deadline and she had reminded them to file the application within time.

18.  As to this, it is clear that the application is 14 days, and not just one day, out of time. Further, the applicant’s assertion that she had already signed her affirmation in support before the deadline is contradicted by the fact that it is dated 24 February 2011.  In any event, the attempt to lay the blame on her former solicitors, although it may be a matter of complaint as between her and them, is not a good excuse for the delay.  This is therefore a case in which the delay is inexcusable.

19.  Where a delay is inexcusable although insubstantial (which is the situation in the present case), a party seeking an extension of time must show a real prospect of success on the merits: see Secretary for Justice v Hong Kong & Yaumatei Ferry Co Ltd [2001] 1 HKC 125 at 129I applying Chiu Sin Chung v Yu Yan Yan Angela [1993] 1 HKLR 225 at p. 229 line 45.

20.  Therefore, in the circumstances of this case, the threshold for the grant of leave is not simply the test of a reasonable prospect of success but rather the test of a real prospect of success on the merits.

Do the proposed grounds of appeal demonstrate a real prospect of success?

21.  As noted above, the petitioner’s Intended Grounds of Appeal dated 5 August 2011 summarise and cross-refer to the initial draft Grounds of Appeal exhibited to the petitioner’s affirmation.  The latter document is not drafted in the normal form of a notice of appeal.  In particular, it does not begin by setting out the relevant order appealed against and then the order which the party appealing seeks by way of substitution.  This approach is not helpful and, given that the initial draft Grounds of Appeal were drafted by counsel, this is a situation which this court should not find itself faced with.

22.  I shall deal briefly with each of the proposed grounds of appeal in turn to consider if a real prospect of success on appeal is disclosed by any of them.

23.  By way of preface, however, it is pertinent to note that the proposed grounds of appeal all seek to attack findings of fact made by the Judge after an evaluation of the evidence adduced before him.  In the circumstances, unless the applicant can show that the Judge misunderstood the evidence, or failed to appreciate its effect, or overlooked some documentary evidence, or other indisputable evidence, which should have compelled him to a different conclusion, this court will not interfere with those findings of fact.

24.  Ground 1 concerns a challenge to the Judge’s finding that there was no conduct of an obvious and gross nature to be taken into account in deciding on the issue of ancillary relief (Judgment §151).  The petitioner complains that the Judge found that the respondent and the 1st and 2nd interveners (his parents) jointly carried out a sham arrangement for the purpose of obtaining tax advantages and so this should have been taken into account.  In her oral submissions, the applicant went further and described the arrangement as a fraud on the part of the respondent and his parents.

25.  The finding that there was no conduct of an obvious and gross nature to be taken into account on the issue of ancillary relief was a finding of fact which the Judge was entitled to reach and I do not consider the petitioner has a real prospect of success of overturning that finding.  It is clear that the Judge’s conclusion on the question of conduct and how that might affect his ruling on ancillary relief was reached after taking his conclusions as to the sham arrangement into account.  Furthermore, there was no evidence that the sham arrangement was entered into with a view to defraud the petitioner or defeat any potential claims by her for ancillary relief and, on the contrary, the Judge concluded the arrangement was entered into purely for tax advantages (Judgment §47).

26.  Ground 2 is a challenge to the Judge’s refusal to order the respondent to repay a particular monthly payment of HK$18,000 made by him to the 2nd intervener (his mother).  The petitioner had claimed this was rent but the Judge held the tenancy was a sham arrangement.  However, although the Judge found the tenancy to be a sham arrangement, he nevertheless found that the HK$18,000 monthly payment was a genuine expense of the respondent, being a contribution towards his parents’ living expenses (Judgment §140).  This was a finding of fact by the Judge and I do not consider the petitioner has a real prospect of success of overturning that finding.

27.  So far as ground 2 seeks to attack that finding by reference to the fact that the respondent had claimed, in his original Form E, that he made a monthly payment of HK$15,000 to his parents as well as the HK$18,000 monthly payment of rent, by the time of the trial the respondent had filed an updated Form E which superseded the original Form E and in which he confirmed that he only made one monthly payment of HK$18,000 to his parents.  This therefore does not assist the petitioner.

28.  Ground 3 concerns the Judge’s conclusion that the respondent did not have a beneficial interest in a property referred to in the judgment as the City Garden property.  The petitioner seeks to argue that the Judge was wrong to find that the source of the purchase monies or mortgage repayments for the property came from the 1st and 2nd interveners and that instead the source of those payments was the respondent.  However, the Judge’s finding of fact was that the payments made by the respondent to the 1st and 2nd interveners were contributions to their living expenses and not intended to give rise to a beneficial interest on his part in the City Garden property (Judgment §§89 to 91).  I do not consider the petitioner has a real prospect of success of overturning that finding. Furthermore, the Judge’s finding was consistent with the evidence demonstrating that the 1st and 2nd interveners did have sufficient means to purchase the City Garden property.

29.  The applicant drew specific attention in her oral submissions to a payment of HK$125,800 made by the respondent for decoration of the City Garden property identified in this ground of appeal as a basis for arguing that the respondent did have a beneficial interest in it.  However, it is to be noted that the Judge considered and dealt with this payment and, whilst he held that the respondent should account for this (Judgment §§68-70 and 133(2)), he nevertheless concluded (as he was entitled to) that the respondent had no beneficial interest in this property.

30.  Ground 4 concerns a property referred to in the judgment as the Granville Garden property.  The Judge identified the relevant issue as being whether the payment of HK$4.06 million by the 1st intervener to assist in the purchase of this property was a gift (as contended by the petitioner) or a loan (as contended by the respondent).  He found it was a loan and also that the respondent made repayments of that loan by way of payments to fund the purchase of another property, referred to in the judgment as the Aldrich Garden property, in the name of the 1st intervener (Judgment §§115 and 116).  In my opinion, the petitioner does not have a real prospect of success of overturning those findings of fact by the Judge.

31.  Ground 5 concerns the Aldrich Garden property and, as noted above, the Judge found that payments made by the respondent in respect of the purchase of this property were by way of repayment of a loan from the 1st intervener. As such, there was no basis for concluding that the 1st intervener was holding the Aldrich Garden property on trust for the petitioner and respondent.  I do not consider that the petitioner has a real prospect of success of overturning the Judge’s findings of fact which led to his conclusion regarding the beneficial ownership of this property.

32.  In her oral submissions, the applicant sought to argue, by reference to a table she had prepared, that entries in a ledger relied upon by the respondents at trial were illogical.  Ms Janine Cheung, counsel for the respondents, informed us that the ledger was a document produced by the 1st intervener to show repayments to him by the respondent which repayments were utilised to pay off the mortgage for the Aldrich Garden property.  However, Ms Cheung informed us that, although the 1st intervener was cross-examined on his ledger at the trial, the argument that the entries in the ledger were not logical was not canvassed below.  The applicant’s arguments based on her table do not, in my opinion, demonstrate a ground of appeal with a real prospect of success.

33.  Ground 6 concerns the Judge’s findings of facts as to the respondent’s assets.  The petitioner’s argument appears to be that the Judge was wrong not to have taken an aggregate sum of HK$978,200 into account when computing the respondent’s assets.  This is, in substance, a challenge to the Judge’s finding that both parties did not have any positive capital for the purpose of distribution in the ancillary relief applications (Judgment §145).  I do not consider that the matters raised in this ground of appeal show a real prospect of successfully overturning that finding of fact by the Judge.

34.  Finally, ground 7 seeks to argue that the Judge erred in not requiring the respondent to account for various sums withdrawn from his bank accounts during the period between the petitioner’s departure from the matrimonial home and the commencement of proceedings.  The various withdrawals were addressed by the Judge (Judgment §§50 to 70).  He concluded that, save for three particular sums, the respondent was not liable to account for these withdrawals.  The three particular sums the Judge considered the respondent should account for were added back into the respondent’s assets for the purposes of determining the appropriate orders to make under the Matrimonial Proceedings and Property Ordinance (Cap. 192).  No basis is advanced for the petitioner’s contention that the Judge erred in not requiring the respondent to account for the other sums.  As such, it simply cannot be said that the petitioner has an appeal with a real prospect of success in respect of those sums.

35.  For the reasons set out above, I conclude that the petitioner’s intended appeal does not have a real prospect of success and, accordingly, I would therefore dismiss the petitioner’s application for leave to appeal.

36.  I would make a costs order nisi that the applicant pay the costs of the application (including the costs of the hearing on 8 July 2011 which were reserved) to the respondent, to be taxed if not agreed.